Hearings and Business Meetings

Jun082006

SD-366Energy Committee Hearing Room10:00 AM

The Honorable Jon Wellinghoff

Chairman, Federal Energy Regulatory Commission

TESTIMONY OF JON WELLINGHOFF

NOMINEE TO BE A MEMBER OF THEFEDERAL ENERGY REGULATORY COMMISSION

BEFORE THE COMMITTEE ON ENERGY AND NATURAL RESOURCES

UNITED STATES SENATE

June 8, 2006

Chairman Domenici, Senator Bingaman and distinguished members of the Committee, I am honored to be considered today by you for confirmation of my nomination to the Federal Energy Regulatory Commission (FERC). I thank President Bush for nominating me. I am also grateful for the trust and confidence expressed by Senator Reid who recommended me for this position.

Energy and regulatory law and policy have been the primary focus of my career for more than thirty years. I have worked both in the public and private sectors. I have represented both consumers and utilities. I have supported business and public interests advocating energy efficiency, renewable energy, retail competition, and clean coal technologies. Like Chairman Domenici, I first worked as a junior high school math teacher. Like Chairman Domenici, I too quickly turned to law. After law school I became a legal assistant to Evo Granata, Commissioner of the Nevada Public Utilities Commission (NPUC). This was the time of the Arab oil embargo, and utility rates were rising faster than ever before. In my two years at the Nevada Commission I saw more utility rate cases compressed into that short period of time than in the preceding ten years. I definitely felt as if I had earned my “Ph.D.” in utility regulation in that job under the expert tutelage of Commissioner Granata and Chairman Noel Clark.

After working for the Nevada Commission, I held a number of positions in the public sector including Deputy District Attorney in Nevada and staff attorney for the U.S. Senate Commerce Committee and the Federal Trade Commission in Washington, D.C. All of these positions encompassed work on energy-related matters.

Returning to Nevada, I worked with the then Attorney General, later Governor and U.S. Senator, Richard Bryan, and a private citizen, Randolph Townsend, who would later become a prominent State Senator, to create the first Consumer Advocate in Nevada for Customers of Public Utilities. I was appointed by Attorney General Bryan to serve as Nevada’s first Consumer Advocate. In that office, I represented the interests of Nevada’s utility ratepayers before the Nevada Commission and the FERC. I was Nevada’s Consumer Advocate for seven years, serving term appointments under both Democratic and Republican Attorneys General. I managed and developed strategy for multiple electric and natural gas proceedings in Nevada. I also developed legislative policy and instituted a number of energy policy initiatives during my two terms. The most important initiative was drafting the first comprehensive integrated resource planning (IRP) act for Nevada’s electric utilities. Nevada’s act was passed in 1983 and became a model for similar acts that were subsequently passed in 17 other states. After passage of the act, I participated in the IRP rulemaking process before the NPUC and managed numerous related cases.

In the eighteen years since, with the exception of a short return to the public sector as Staff Counsel to the Nevada Commission, I have been in private practice as both an attorney and an energy consultant. I have testified and/or consulted in various states including Colorado, New Mexico, Arizona, Texas, Washington, Hawaii, Oregon, Nevada, and California on the IRP process, energy efficiency, demand response, natural gas decoupling, and other energy issues.

For the past six years I have been in private practice with the law firm of Beckley Singleton in Las Vegas and Reno, Nevada. I have been a Shareholder in the firm for the past four years. During my time at Beckley, I have represented numerous clients in energy-related matters including utility rate proceedings, IRP cases, legislative proceedings, and power contract negotiations. My clients have included the Department of Energy, DOD/Department of the Navy, Sandia Labs, major international corporations, utilities, manufacturers of energy efficiency equipment, and renewable resource developers. During this period, one of the legislative energy policy initiatives I proposed on behalf of my clients was Nevada’s Renewable Portfolio Standard (RPS). That RPS legislation originally created a market for the sale of 15% renewable energy to Nevada’s electric utilities as enacted in 2001 and was then amended by a proposal I submitted to the legislature in 2005 to a 20% RPS market. Since the first enactment of an RPS in Nevada in 2001, I have consulted on RPS proposals in California, Oregon, Idaho, New Mexico, Arizona, and Colorado. In addition to my policy work on RPS legislation, I also experienced first hand the challenges of electric market restructuring in representing clients in the aftermath of market failures in the West during the 1999-2002 timeframe.

The FERC is an important independent regulatory agency with an essential mission. The Congress has placed even greater responsibility on the agency with the enhancements to FERC’s powers in the Energy Policy Act of 2005. Resource adequacy, electric system reliability, demand response, and transmission planning are all integral to the IRP process that I helped initiate in Nevada and numerous other states. These are also issues for which FERC has been given a level of responsibility under the Energy Policy Act of 2005. If confirmed, I hope to transfer the experience I have gained in these areas working at a state level to my work at FERC. I also hope to bring with me, if confirmed, my thirty years of experience in the regulation of electric and gas utilities and my general philosophy of energy regulation which is to keep it efficient, effective, and responsive to the needs of the energy consumer.

In closing, I want to acknowledge and thank my wife, Karen Galatz, who has been with me through over two thirds of my career in energy law. I could have accomplished little without her by my side. She could not be here today at my confirmation hearing as she had to be with our two sons who are taking their junior high and high school final exams in Nevada. I appreciate the opportunity to testify before you today and am happy to answer any questions you may have.